Advisers must find their "unfair advantage" – Canter
Planning, merging and consolidation are the way to grow.
For David Canter, it’s quality, not quantity, that matters for Fidelity’s investment adviser segment. But bigger is better, too. Mr. Canter took over as head of the registered investment adviser segment of Fidelity Clearing & Custody Solutions earlier this month from Bob Oros, who had held the position for the past five years. His job: Overseeing sales and relationship management for the increasingly important division.
He’s coming in at a time when the “investment” part of an RIA’s duties is becoming increasingly commoditized and less profitable. “They need to be better discoverers and diagnosticians,” Mr. Canter said. “To be a good adviser, you need to be a comprehensive problem-solver.”
Mr. Canter joined Fidelity in 2009 as chief operating officer for the RIA business. A year later, Fidelity tapped him to strengthen and expand the practice management and consulting offering, focused on helping advisers accelerate growth, streamline their operations and manage risk.
His current job means he must help advisers to think about how to grow their top-line revenue and how to control expenses in a time when competition is driving investment fees down and demand for other services up.
Increasingly tough issue
“Advisers need to think about what they can do to add value that can’t be commoditized,” Mr. Canter said. “It’s an increasingly tough issue, because many advisers think of their value proposition as investment-led.”
For many investment advisers, Mr. Canter said, the question to answer is, “What’s your unfair advantage in the marketplace?” In other words, what do you have to offer that makes clients want to do business with you? “The strategy is easy, but the execution is hard,” he said.
For many advisers, answering that question leads to specialization. For example, some specialize in executives from a few companies. They make it their business to understand retirement plans, pensions and other options that executives from those companies have available.
Other companies specialize in small businesses — and increasingly, in specialty small businesses, such as manufacturers in the rust belt. “It’s a lot of hard work, but we [and] they see the perils of leading a quarterly presentation with portfolio performance,” Mr. Canter said. “It’s not always a rosy conversation.”
While Fidelity lags behind rival Charles Schwab in the adviser business, Mr. Canter said he’s more interested in larger advisory firms. “For our platform of 2,800 RIAs, we tend to work on firms with $150 million or more,” he said.
(More: Fidelity’s RIA business: a strong No. 2 — and trying harder)
Helping firms get larger is an abiding interest. Fidelity holds an annual mergers and acquisitions forum to help advisers learn about the best ways to join with others to increase revenues and decrease expenses.
“There’s a hunger for information in wealth management — what is happening and what the trends are,” Mr. Canter said.
“The constant refrain from advisers is, ‘Help us grow,’” he said. “The great news is that there’s a bull market for advice, and RIAs are in a perfect place to fill that need.”
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